Leader of Government Business Kurt Tibbetts and backbench MLA Alfonso Wright have been named as defendants to a legal action filed in court last Thursday by Everard ‘Denny’ Diedrick.
The writ of summons, filed by Broadhurst Barristers on behalf of Mr. Diedrick, claims the defendants are in default of a CI$700,000-plus-interest promissory note signed in relation to the purchase of Hampstead Ltd., an office supply store that used to operate on Airport Road.
The writ states that Hampstead Ltd. was sold for a price of CI$1.75 million with an agreement evidenced by a Memorandum of Understanding dated 5 February, 2002. The agreement called for the defendants to assume ownership of the business on 1 March 2002.
As part of that agreement, the defendants were to make monthly payments of CI$13,838.90 into an account at Butterfield Bank for 15 years. Security for the payment was to be promissory notes signed by Hampstead’s Ltd. and the defendants individually.
The writ states that on 1 April, 2002, a promissory note for CI$700,000 was signed by the company and the defendants. The promissory note was to be repaid by 60 consecutive monthly payments of CI$13,838.90 commencing 1 June 2012.
Terms of the promissory note stated it was collateral to the MOU of 5 February 2002 and that the note would become immediately due and payable under certain conditions. Those conditions included failure in the performance of any of the terms or conditions of the MOU.
The writ claims the defendants caused the company to default in its borrowing covenants with Butterfield Bank by failing to pay CI$13.838.90 into an account at the bank.
‘On 21 February, 2008, the attorneys for the bank advised the plaintiff that the company had seriously defaulted with respect to its banking obligations,’ the writ stated. ‘In the premises, the defendants have breached their agreement with the plaintiff as set out in or evidenced by the MOU in that they failed to pay all of the monthly payments to the Bank.’
Because the terms of the MOU were breached, Mr. Diedrick exercised his option to make the promissory note due in its entirety by way of a written notice dated 3 September, 2008.
The writ states the defendants failed to pay the note and therefore are liable to pay CI$700,000 plus interest of CI$2,301.45, plus additional interest that is accruing at CI$153.43 per day.
This was not the first time the Hampstead purchase has caused controversy for Mr. Tibbetts and Mr. Wright.
In January 2006, Leader of the Opposition McKeeva Bush claimed Mr. Tibbetts and Mr. Wright received preferential treatment from Land Registry when it accepted an affidavit – instead of a signed contract – for proof of interest in the Hampstead property, allowing a Restriction barring dealings to be put on the parcel.
That affidavit was accepted by Land Registry as proof of interest even though it was sworn by Mr. Tibbetts, Mr. Wright and Mr. Diedrick, but only signed by the first two.